Malta MedAir to be liquidated along with Air Malta

Tista’ tara dan l-artiklu bil-Malti hawn.

Malta MedAir, a government ‘phantom’ airline company registered in 2018 used in an elaborate accounting exercise to give a false impression that Air Malta was turning a profit, is now expected to be liquidated together with Air Malta, according to the government’s secret plan to create a new national airline later this year.

Sources close to the finance ministry told The Shift that as part of the government’s Plan B, drawn up in anticipation of a negative decision from the European Commission on its request to inject more state aid into the flailing airline, Finance Minister Clyde Caruana has now also decided to axe Malta MedAir, and make all its employees redundant, in order to start a new national airline company from scratch.

According to the detailed plans, which have already been approved by Prime Minister Robert Abela, and which are still being discussed in Brussels, all the assets currently held by Malta MedAir – particularly the Heathrow and Gatwick slots valued at some €50 million- will be ‘acquired’ by the new airline.

Those assets will be used as collateral for the banks and other financial institutions that will be called in to finance the new government venture.

The plan – which will mean redundancy for all Air Malta employees still on the airline’s books by the time of its dissolution – will take into consideration some ‘important’ Air Malta employees, mostly those close to the ruling Labour Party. These employees are expected to be ‘recruited’ by the new national airline company where they will assume its top managerial posts, although on less lucrative contracts than those currently being paid by Air Malta.

After refusing to rule out the possibility of dissolving Air Malta, Finance Minister Clyde Caruana yesterday surprisingly said that “all is going according to plan” at the national airline.

However, government sources told The Shift that Caruana’s declarations are “very far from the truth” and are only intended to give a false impression, mostly to employees, to keep their morale high.

“The main reason the minister postponed the cut-off date for Air Malta employees to be transferred onto the government’s books, which was postponed from August to December, is to provide for a smoother transition into his already-devised secret plan,” the sources said.

They also confirmed that a decision has not yet been taken on the date of Air Malta’s dissolution, although that will most likely take place sometime this autumn. The government is planning to, politically, ‘blame’ the European Commission for the ‘forced’ decision.

A few weeks ago, The Shift had exclusively revealed details of the government’s Plan B for Air Malta.

The plan will be set in motion in the highly probable and increasing likely scenario that Brussels turns down the government’s request to inject an additional €290 million into Air Malta.

According to the plan, which the government is keeping under wraps – leaving all employees and their representatives completely in the dark – Air Malta will be dismantled and a new national airline company will be set up in its place.

The new company will take control of all Air Malta’s few remaining assets, except for its employees, and will be operating a slimmer schedule than that at present. All its ground handling, engineering and other needs will be farmed out to private entities.

The new company will recruit new staff with a much lower headcount than that at Air Malta, and with much lower salaries, which will be based on those being paid by low-cost airlines operating out of Malta.

Minister Caruana has refused to answer The Shift’s questions about Plan B.

Air Malta has been in serious financial difficulty for several years, even though disgraced minister Konrad Mizzi had announced that the airline had turned a profit in 2018 – the last time the company published its annual accounts. That ‘profit’ was made possible thanks to a creative accounting exercise that  Minister Caruana has now admitted to.

In 2012, the EU had already allowed the government to pump €130 million in state aid into Air Malta on the condition that it was to have restructured its operations by 2015. But while the airline had started implementing the programme, it was derailed in its last two years mostly because of mismanagement by the company’s top officials and political interventions.

Minister Caruana’s Plan B is almost a copy and paste of what transpired at Alitalia a few years ago, when the Italian government liquidated its legacy carrier Alitalia and in its stead created ITA – Italia Trasporto Aereo S.p.A.

                           
                               
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D M Briffa
D M Briffa
1 month ago

Thank you, The Shift. Very interesting. Much appreciate the fact that someone is digging into this stuff. A shame the PN, which should be, isn’t.

Joe Savona
Joe Savona
1 month ago
Reply to  D M Briffa

Bigger shame that nothing is coming from the Government!

Raymond Farrugia
Raymond Farrugia
1 month ago
Reply to  D M Briffa

PN is a headless chicken that fails to grasp the occasions presented to it to bring us all back to sanity.

viv
viv
1 month ago

Theft.
Only a fool calls it otherwise.
Malta is run by thieves.
Thieves deserve severe punishment – especially when those whom they are stealing from are struggling.

Last edited 1 month ago by viv
simon oosterman
simon oosterman
1 month ago

It seems to me that it is prudent not to book any flights for October or later on AirMalta unless one is very flexible.

Charles
Charles
1 month ago

Air Malta back to front..Malta Air? aka Ryan Air

A. Charles
A. Charles
1 month ago
Reply to  Charles

Yesterday, my flight from Catania with Ryanair had a small sticker near the door which said Malta Air. Nothing different from a regular Ryan flight except 1hour 15 minutes of late departure and the landing was so violent that when the plane stopped one passenger shouted “siamo vivi “!

simon oosterman
simon oosterman
1 month ago

Those of us that are waiting for refunds should get worried as well.

joe tedesco
joe tedesco
1 month ago

THE PL GOVERNMENT IS A FAILED ONE,ALREADY EXPIRED.

saviour mamo
saviour mamo
1 month ago

Does the prime minister intends to issue shares for the new airlines? Who could have interest in investing when once bitten twice shy.

E. Abela
E. Abela
1 month ago

Even travel agents,and local tour operators should be getting worried.

Last edited 1 month ago by E. Abela
Joseph Tabone Adami
Joseph Tabone Adami
1 month ago

It’s a good thing that some important ex-Air Malta ’employees’ have already been found an alternative cosy niche elsewhere and need not trouble themselves about securing their future, isn’t it!

Joe Savona
Joe Savona
1 month ago

Like Karl SN!

Gordon Cook
Gordon Cook
1 month ago

But they will still get the redundancy for sure. Jobs for the boys as always.

makjavel
makjavel
1 month ago

It is an exercise of destroying all trace of responsibility and eventual court investigation.
Leaving NO Stone Unturned , is the name of the game.

Anthony Briffa
Anthony Briffa
1 month ago

This is a disgusting plan to hide the failures by labour Ministers during the last ten years. It is dishonest to still continue to blame the PN, when it left a recovery Programme after obtaining a permission from the EU to inject €130 million into Air Malta, to be completed by 2015. Needless to say this sabotaged by the 2013 Labour Government, with the help of the Labour managers, who are in line to be re-appointed in the new outfit. How can failed managers going to go anywhere the offices of the new outfit. Furthermore the government is asking for an excessive amount of subsidy, €290 million, to trust failed Chairman, at Directors and Managers to lay hands on those funds. This excessive is a trap so that the EU will definitely block, for it to be blamed for halting the restructuring and go for closing down Air Malta. This is vile and dishonest, and a guarantee that the new airline will start being managed by labour diehards and a platform for employing labour supporters. I can imagine the Ministers and labour MPs competing for the positions for there people, min hu laqwa jhawwel.

viv
viv
1 month ago

Wow. brilliant Clyde. When it crashes – give it the old ‘turn it off, turn it on again’.
It mostly smacks of egotism.

Maggie Roberts
Maggie Roberts
1 month ago

I agree with the majority of the comments made but nobody has mentioned what is going to happen to those who have already booked flights beyond end of October. Hundreds of people have already booked for Christmas and Air Malta are still taking bookings!! 👿👿

carlos
1 month ago

Bis-sahta ta dan il-gvern korrott, dak kollhu li nbena matul is-snin qieghed jigi zarmat.

Vicious
Vicious
1 month ago

Another money laundering opportunity for both government and ground handling company. Privatise everything, cover where the money went, “sell” shares and erase any trace of fraud

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